Credit repair and credit counseling services share the goal of helping you manage and improve your credit. At a glance, they seem like rephrasing the same services, but each has a distinctive approach to how they help you repair your credit scores.
The Phenix Group offers the best credit repair in Houston. This includes credit counseling services, as each plays a key role in building your financial literacy and confidence. Say good-bye to wondering if closing one account will result in your score dropping so low that you no longer qualify for that mortgage loan you want–these services will empower you in your financial future.
Let’s explore the differences between credit repair services and credit score consultations, so you can make an educated choice in how you can clean up your credit report.
The Differences Between Credit Repair and Credit Counseling
Both credit counselors and credit repairers focus on righting the wrongs on your credit reports. This means analyzing your reports for inaccuracies or items that have exceeded the seven year mark on your report, and working with creditors to remove them.
Where the two diverge is how they go about repairing your credit. The key difference is credit counseling focuses on educating consumers about budgeting and money management. The end goal is to build financial literacy. Credit repair focuses on the past: they scour your credit reports for inaccuracies, frauds, and outdated items to scrub them from your reports to boost your score.
What Is Credit Repair?
As we mentioned above, credit repair services focus on negative factors that are already part of your credit report. They focus on past items rather than building financial literacy and proactive plans to manage current debts or ongoing financial issues.
Credit repair services cannot remove timely or accurate items from your report. Nobody can remove those items, you simply have to wait seven years for negative information to become outdated on your reports. These services only search for inaccuracies and outdated items, and then advocate on your behalf to creditors and credit bureaus to have those items removed. Other things credit repair services can do include:
- Verify all identifying information (name, address, social security numbers) are accurate on your reports
- Validate late or missing payments
- Check the accuracy of tax liens, charge-offs, and bankruptcy claims
- Contact collections agencies with cease-and-desist letters
- Collect information to dispute errors in your credit reports
What Is Credit Counseling?
Credit counseling, on the other hand, is a more proactive approach to rebuilding and repairing your credit. The goal is to provide education and guidance to consumers, like you, to help them stay out of debt; it covers all bases when it comes to financial literacy. A credit counselor will evaluate your individual situation, develop a plan to pay off your debts, and offer financial guidance.
This guidance they can provide includes:
- Examining your credit report and explaining the impact each item has on your score
- Advise you on how to understand your score and reports, including how to correct mistakes on your reports
- Offer counseling for major financial steps, such as purchasing a home, managing student loans, and saving for retirement
- Educate you on the differences between debt settlement, consolidation, and debt management
- Help you set up a monthly budget to stay on top of your outstanding debts
Which Is Right for Me?
If you can’t decide whether credit counseling or credit repair is right for you, take a beat and look at your current situation: are you pressed for time and overwhelmed just thinking about your reports? A credit repair service can take a load off of your shoulders by finding those inaccuracies and take the steps to remove them from your report for you.
Credit counseling is ideal for those who live by the phrase, “If you give a man a fish, he’s fed for the day. If you teach a man to fish, he’s fed for life.” Credit counseling is more time-consuming and takes more effort on your end, but it builds skills and structures that can ensure financial stability and improved credit.
After credit repair services look over your reports, we recommend setting up credit counseling services to ensure you maintain best practices regarding your credit. At The Phenix Group, we can help out when you’re in a pinch, and help you stand on your own once again!